FORD CASE STUDY
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Part Four
| Extending Marketing
COMPANY Case
Ford: Resurrecting an Iconic
Company
The old phrase, “The bigger they are, the harder they fall,” perfectly describes what has happened to the U.S. auto industry over the past decade. Consider the Ford Motor Company. In 1998, the iconic company accounted for 25 percent of all cars and trucks sold. Its F-series pickup was the best selling vehicle on the planet, with more than 800,000 units rolling off assembly lines. The Ford
Explorer held the top slot in the hot SUV market. And the Ford Taurus had been a perennial contender for the top selling sedan. Ford was number two on the Fortune 500 (GM was number one) with
$153 billion in revenues. A strong stock price gave Ford a market value of $73 billion. And according to Interbrand, the company was the sixth most valuable brand in the world, worth $36 billion.
But in only 10 years, its position at the top fell apart like a rusting old jalopy. In 2008, its market share sat at just 14 percent.
Revenues had dropped to $146 billion, and the company lost
$14.7 billion, the biggest loss in its history. Its stock price had plummeted to only $2 a share, erasing 93 percent of its market value. And it was no longer a top ten brand. It had dropped to the
49th position on the Interbrand top-100 list, worth only $7 billion.
The company verged on collapse.
Ford could try to explain its misfortunes by pointing out that the entire auto industry was reeling by 2008. High gas prices and the weakest global economy in over 70 years had made a mess of automobile sales. But that wouldn’t explain its drastic drop in market share or the magnitude of its losses relative to the rest of the industry. The company was in far worse shape than most car companies.
Looking back, it’s clear that Ford had taken its eye off the market. It had become too dependent on gas-guzzling trucks and
SUVs and could not shift quickly enough to more fuel-efficient vehicles. Its vehicle quality had suffered, and its
Part Four
| Extending Marketing
COMPANY Case
Ford: Resurrecting an Iconic
Company
The old phrase, “The bigger they are, the harder they fall,” perfectly describes what has happened to the U.S. auto industry over the past decade. Consider the Ford Motor Company. In 1998, the iconic company accounted for 25 percent of all cars and trucks sold. Its F-series pickup was the best selling vehicle on the planet, with more than 800,000 units rolling off assembly lines. The Ford
Explorer held the top slot in the hot SUV market. And the Ford Taurus had been a perennial contender for the top selling sedan. Ford was number two on the Fortune 500 (GM was number one) with
$153 billion in revenues. A strong stock price gave Ford a market value of $73 billion. And according to Interbrand, the company was the sixth most valuable brand in the world, worth $36 billion.
But in only 10 years, its position at the top fell apart like a rusting old jalopy. In 2008, its market share sat at just 14 percent.
Revenues had dropped to $146 billion, and the company lost
$14.7 billion, the biggest loss in its history. Its stock price had plummeted to only $2 a share, erasing 93 percent of its market value. And it was no longer a top ten brand. It had dropped to the
49th position on the Interbrand top-100 list, worth only $7 billion.
The company verged on collapse.
Ford could try to explain its misfortunes by pointing out that the entire auto industry was reeling by 2008. High gas prices and the weakest global economy in over 70 years had made a mess of automobile sales. But that wouldn’t explain its drastic drop in market share or the magnitude of its losses relative to the rest of the industry. The company was in far worse shape than most car companies.
Looking back, it’s clear that Ford had taken its eye off the market. It had become too dependent on gas-guzzling trucks and
SUVs and could not shift quickly enough to more fuel-efficient vehicles. Its vehicle quality had suffered, and its